Intellectual Brownian Motion

Category Archives: Municipal Politics

Some candidates seem confused about municipal taxes this election. I thought I’d clear up a few facts about property taxes for your (and their) benefit.

Property taxes are made up of three components: the municipal portion (roughly 60%), the county portion (24%) and the education portion (16%). The rate (also called the mill rate) for each portion is set independently by its own body (the province sets the education levy).

The total rate is called the blended rate. The town’s portion is the town-own rate. Usually the blended rate is used because that reflects best what homeowners see. The rate depends on the type of property you own: residential, commercial, industrial all have different rates. Single-family and multi-residential are also different.

Let’s look at how taxes were calculated in 2014 for a single-family house valued at $200,000:

Total taxes payable will be $2,526.31, broken down as follows:

Education levy $406.00

County levy $608.00

Town levy $1,512.32

The value of your home – of every home in Ontario – is set by MPAC, the Municipal Property Assessment Corp. This is an independent provincial agency headquartered in Pickering. It sets the value of your home through a computer model that looks at the value of properties around you and at real estate sales in your neighbourhood.

This model means your home value can increase whether you do anything to it or not.

I was amused by a recent comment I had voted “95%” the same as others on council. This was followed by the inevitable accusation of “block voting.” The complainer apparently wants everyone to vote in some helter-skelter manner. God forbid we should all agree on anything.

It’s a tired old campaign tactic: to accuse your opponents of being a “voting bloc” simply because they can agree on things. Oooh, scary: people voting alike. Don’t vote for those people: they agree instead of fighting and arguing. Damning politicians for getting along.

The vast majority of things that arise for votes at a municipal council table are procedural, administrative or bureaucratic. We vote to approve staff recommendations and reports, to receive items for information, to accept tenders for previously-approved budget items, to accept committee minutes, to approve agendas and minutes. We even vote to adjourn. Scary!

There’s seldom more than a sliver of a reason to vote against these issues. When big or contentious issues arise – and they are seldom – at the table, we vote as our conscience dictates. Our municipal council is not a partisan body. Party politics do not play an overt role (despite the efforts of some former politicians to force them upon us).

Think about it: there are only TWO ways to vote: yes or no. For or against. Not nine: not a different way for every council member. Just two. There will ALWAYS be at least five people voting the same way on EVERY issue. Is that a block? If you think so, you really don’t have a clue about politics.

Many of us at the table campaigned on common issues: finance, budget, taxes, growth, the harbour, openness, and so on. Of course we will vote similarly when these issues arise because that’s what we stood for on the hustings. It would be hypocritical to vote against something you advocated for or campaigned in favour of.

Who wouldn’t vote yes to control municipal spending, reduce the debt, lower taxes, or improve our accountability? Does that make it a voting bloc? Of course not. It simply makes it common sense.

Maybe what the records show is that councillors often voted the same way because we generally agreed with one another. That we share a common vision for the greater good. That our strategic planning sessions helped outline our common priorities and we pursued them. That the votes reflect this council’s cooperation, effectiveness, and team spirit.

Now is that a bad thing? Of course not.

Voting blocs? Piffle. Just the opposition trying to deflect your attention from what matters this election.

So what kind of council do you want next term? A positive, cooperative and effective one – or an ineffective group, beset by the bitterness, bickering and divisions that fragmented the previous council? It’s easy to see which candidates to vote for if you choose the positive.

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In 1787, the Empress Catherine II took a long trip to the Crimea along the Dnieper River. She wanted to see how her subjects lived. Not wanting her to see the actual poverty and hardships of the peasants, her lover – and the region’s governor – Grigory Potemkin, had pretty, fake villages of canvas and clapboard built along the way, with his own people acting and dancing the roles of happy peasants. After she visited one, the village was disassembled and rushed down river by barge to be rebuilt further away.

These have become known as Potemkin villages. According to Wikipedia, the term is used today,

…in politics and economics, to describe any construction (literal or figurative) built solely to deceive others into thinking that some situation is better than it really is.

But there’s also the opposite: when it refers to an imaginary construct that is negative: when such constructs are used to divert attention from an embarrassing situation or condition. Or, in some cases, an inconvenient truth.

Politicians have been accused of creating Potemkin villages to embellish situations and put a Pollyanna face on social or political ills. But their opponents – especially during election campaigns – also create their own facades to make the reality look worse. They create shabby Potemkin villages; cardboard slums, ugly-looking facades simply to make themselves look good by making the incumbents look bad.

Collingwood’s municipal election has its own shoddy Potemkin villages. Opponents have created a shabby, fake facade on the economic situation, on the recreational facilities, on economic development and on this council’s many achievements. They would have their followers believe that little if any good has been accomplished this term. They’ve erected not a few of these faux derelicts on social media.

It’s good for councillors to know we’ve already accomplished so much that everyone wants to emulate us. Listening to the all-candidates’ speeches and reading the campaign literature is a real boost to the ego.

A lot of new people are promising to do what’s already been done. Incumbents can comfortably sit back and say, “been there, done that, accomplished that already.” We don’t seem to have left a lot for the newcomers to accomplish.

It’s been a very productive term – remarkably so given that we have so few meetings that last more than two hours. (For a list of just a few things we accomplished this term, see my ACM speech.) But still, some candidates seem to want to repeat our successes.

Take for example the promise to “diligently manage our finances and assets…” Check. Already done. We have an asset management plan in place and we started the long-term financial management strategic plan. But we’ve made our finances sustainable this term, so we don’t have to fret so much about them in future. Our practice of replenishing reserves through internal loans rather than just spending them is one example. (Read more about that practice here)

Same with the promise to “Stop the waste by developing a long-range financial plan and transparently evaluating all capital investments.” Aside from the mystery of how one evaluates “transparently” (does that mean invisibly?), we have an asset management plan in place and the strategic financial plan is in the works.

Staff do any evaluation, by the way – councillors only read and comment on their efforts. And any such evaluations would always be public.

As for waste – this council has trimmed the budget and cut spending for the past four years. We’re kept tax increases down to a blended average of only 0.45% per year – less than the cost of living. We saved taxpayers more than $400,000 a year by stopping the rail service (while keeping the line active for future transportation opportunities). And we topped up reserves from $19 to $30 million! No waste here!

Ditto for creating a “plan that looks at our long term financial health.” Initiated by this council, thank you, and will, I expect, be completed before this term is over. We made financial stability a priority at our first strategic planning session in 2011, reinforced that priority at our second strategic planning session in 2013, and we achieved it.

“Manage our high debt load…” Thanks for the advice, but we have paid down $7.5 million of the $45 million debt we inherited this term without raising taxes. We controlled spending and instituted a sustainable plan to finance projects from reserves through internal loans. And we topped up reserves, too. So cross that one off, too because we’re one step ahead of you.

While it was intended as a general ‘charter of free inquiry,’ the Buddhist Kalama Sutra (or sutta) contains wise words that all voters – especially local voters – should heed during the municipal election campaign.

The Kalamas were a people in ancient India. Gotama visited them and stopped in a town called Kesaputta, where he gave a sermon, now referred to as the Kalama Sutra. At first the citizens came to him with a deep problem: how to trust what people were telling them. They had been visited by many religious teachers who all held divergent views. Not unlike candidates for Collingwood council going door to door. Well, without the spirituality and a few badmouthing other candidates, too. But let’s not get distracted by them.

There are some monks and brahmans… who visit Kesaputta. They expound and explain only their own doctrines; the doctrines of others they despise, revile, and pull to pieces… Venerable sir, there is doubt, there is uncertainty in us concerning them. Which of these reverend monks and brahmans spoke the truth and which falsehood?”

That’s a lot like trying to decide which candidate is the best one(s) to vote for. Some explain what they stand for while others merely revile what others stand for. Some offer hope and a future, others tear it down. Some simply tell lies. Doubt and uncertainty arise. When they come to your door or make statements in an all-candidates’ meeting, how do you trust what they say?

That’s when the Buddha made one of his most memorable speeches, in which he told the listeners they had to decide the truth for themselves, to examine the claims and prove what is right or wrong for themselves, and not make choices based on hearsay, ideology or gossip:

It is proper for you, Kalamas, to doubt, to be uncertain; uncertainty has arisen in you about what is doubtful. Come, Kalamas.

Do not go upon what has been acquired by repeated hearing;

nor upon tradition;

nor upon rumor;

nor upon what is in a scripture;

nor upon surmise;

nor upon an axiom;

nor upon specious reasoning;

nor upon a bias towards a notion that has been pondered over; nor upon another’s seeming ability;

nor upon the consideration, ‘The monk is our teacher.’

One might add some modern terms to that list of things that do not offer a suitable basis on which to form an opinion of what is or is not truthful:

nor by blogs;

nor by speeches;

nor by campaign literature;

nor by self-written pieces in the local newspaper;

nor by innuendo;

nor by unproven or unfounded allegation;

nor by rumour;

nor by email blasts;

nor by claims made when stumping;

He then tells the citizens that to learn for themselves what is bad, what is bad, evil and harmful, they must assess everything by asking, “Does this do good? Or harm? Does it lead to suffering?”

Yesterday members of council received a letter from our auditors that should clear up any misconceptions floating around about debt and debentures. It is clear and succinct.

I was also forwarded an email from a candidate (sent to his supporters) with misleading statements about how much debt there is. I don’t know if it was deliberately meant to be misleading – I suspect rather that the candidate simply doesn’t understand municipal finance. But it isn’t really a complicated process.

And no candidate should make claims based on misunderstanding or misinformation. It is their responsibility to get and present the facts, not fantasies, nor opinions.

In response to concerns over such inaccurate claims and misunderstandings, we asked for a clarification. Sue Bragg, B.B.A., CPA, CA, and partner in Gaviller and Company, which audits the town’s financial statements every year, wrote the following (emphasis added):

We understand there have been some inquiries regarding the “definition of debt” and how the debt levels have changed during this last term of Council.Our professional opinion is that debt is external, contractual debt, typically in the form of bank loans, debentures and mortgages. This definition is in keeping with the presentation of debt on the Financial Information Return prepared annually for the Ministry, as well as the Ministry’s calculation of the Annual Repayment Limit.

Okay, here’s the first important point: debt is external. That’s both the professional and the legal definition of municipal debt as defined by the Ministry of Finance.

Debt is what we owe outsiders: money borrowed with interest and bank charges to be paid. It’s what affects your taxes. It’s our debentures.

It is not any internal loans we have. I’ll get to those a bit later and explain how they work. Just keep in mind that they are not debt by any professional or Ministry calculation.

So then what is our actual debt? Ms. Bragg continues (emphasis added):

As per the 2010 audited financial statements: long-term debt was $45,507,356 and there was a bank demand loan in the amount of $664,013 for a total of $46,171,369. As per the 2013 audited financial statements: long-term debt was $36,860,776 and there was no bank demand loan debt.

We are unable to comment on the 2014 balances as we have not audited those transactions to date.

Got that? We started with a total debt of $46.17 million ($45.5 million in debentures) when we took office. As of Jan. 1, 2013, this council and staff had brought it down to $36.86 million. By the end of 2014, we estimate it will be roughly $38 million because we will pay down more this year, but we also need to borrow for two earlier projects).

At the end of our term, this council will have paid down approximately $7.5 million of our debt, as we have been saying for months now. These are the facts verified by the auditor.

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Bella’s wisdom

"This text contains nothing that has not been said before; I composed it solely to train my mind. However, should others chance upon it, it may benefit them, too."
Shantideva: The Path of the Bodhisattva

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